Tandem Diabetes Care (NASDAQ:TNDM – Get Free Report) and NeuroPace (NASDAQ:NPCE – Get Free Report) are both small-cap healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.
Profitability
This table compares Tandem Diabetes Care and NeuroPace’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Tandem Diabetes Care | -4.58% | -35.61% | -4.53% |
| NeuroPace | -19.34% | -105.64% | -16.51% |
Earnings and Valuation
This table compares Tandem Diabetes Care and NeuroPace”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Tandem Diabetes Care | $1.08 billion | 1.16 | -$204.71 million | ($0.72) | -24.92 |
| NeuroPace | $106.99 million | 3.92 | -$21.47 million | ($0.57) | -21.41 |
NeuroPace has lower revenue, but higher earnings than Tandem Diabetes Care. Tandem Diabetes Care is trading at a lower price-to-earnings ratio than NeuroPace, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Tandem Diabetes Care has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500. Comparatively, NeuroPace has a beta of 1.98, meaning that its share price is 98% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of recent ratings and price targets for Tandem Diabetes Care and NeuroPace, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Tandem Diabetes Care | 1 | 12 | 9 | 1 | 2.43 |
| NeuroPace | 1 | 1 | 6 | 1 | 2.78 |
Tandem Diabetes Care presently has a consensus target price of $27.18, indicating a potential upside of 51.53%. NeuroPace has a consensus target price of $20.50, indicating a potential upside of 67.95%. Given NeuroPace’s stronger consensus rating and higher possible upside, analysts clearly believe NeuroPace is more favorable than Tandem Diabetes Care.
Institutional & Insider Ownership
78.8% of NeuroPace shares are owned by institutional investors. 2.1% of Tandem Diabetes Care shares are owned by insiders. Comparatively, 19.2% of NeuroPace shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
NeuroPace beats Tandem Diabetes Care on 9 of the 14 factors compared between the two stocks.
About Tandem Diabetes Care
Tandem Diabetes Care develops and commercializes technology for people who use insulin to manage diabetes. Its products include insulin pumps, infusion sets and related supplies, along with software for viewing and sharing diabetes-management data. The company’s offerings include the t:slim X2 insulin pump and the Tandem Mobi pump, as well as Control-IQ technology, which can automatically adjust insulin delivery based on continuous glucose monitor readings when used with compatible devices. Tandem also provides mobile apps and cloud-based tools to support users and healthcare providers.
About NeuroPace
NeuroPace, Inc. is a medical technology company focused on treating people with drug-resistant epilepsy. Its primary product is the RNS System, an implanted responsive neurostimulation device designed to detect patterns of abnormal electrical activity in the brain and deliver stimulation in response. The RNS System includes a neurostimulator implanted in the skull and leads placed in or near seizure-onset areas of the brain. Clinicians use the system to review brain activity and adjust treatment, while patients can use accompanying tools to record information about their seizures and share it with their care team.
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